The Bankruptcy Court -

     There is a bankruptcy court for each federal judicial district in the United States, with each state having at least one district. Many of the larger states have multiple districts; for example, California has four---the Northern, Eastern, Central and Southern Districts. Within these districts are further divisions--the Northern District of California features the San Francisco, Santa Rosa, Oakland, and San Jose Divisions, with proceedings also being conducted in Salinas. Smaller states like Wyoming have only one district. There are currently a total of 94 bankruptcy districts in the United States.

List of Bankruptcy Courts in The United States

Local Bankruptcy Rules

     Each bankruptcy district has its own set of local bankruptcy rules peculiar to that district. Most bankruptcy judges have their own operating procedures and preferences, often called "local-local" rules, which they expect to be followed. There are Local Rules of the District Court, which are often expressly made applicable to bankruptcy cases filed in that district. Since the cases are federal in nature, evidentiary matters are governed by the Federal Rules of Evidence. Finally, the U.S. Trustee's Office has promulgated a series of Guidelines which it suggests should be followed in various aspects of bankruptcy cases, which also contain district-to-district variations. Therefore, although bankruptcy is a nationwide, federal law, it is very important for a debtor's attorney to be familiar with all of the applicable rules of the Court where the case is to be filed. Failure to do so could lead to a very unsuccessful result in the bankruptcy case.

The Bankruptcy Judges

     The persons vested with decision-making power in bankruptcy cases are judicial officers of the district court who are designated as "bankruptcy judges". Before 1973, they were known as "bankruptcy referees". There are now hundreds of bankruptcy judges in the U.S. The bankruptcy judge has the ultimate power to decide bankruptcy issues, including those raised in contested matters and adversary proceedings. These may include such matters as whether or not there has been a fraudulent or preferential transfer, whether a plan should be approved, whether a debtor is entitled to receive a discharge of his debts, and a myriad of other issues.

     The judges are arbiters of disputes, and do not issue "advisory opinions" about the bankruptcy process. They generally do not become involved in the bankruptcy process unless one of the parties, whether the debtor, the trustee, or a creditor, asks the judge to rule on a particular issue. This is a departure from practice up to the 1970's, when the referee would be much more involved in the day-to-day workings of the case, and where, due to jurisdictional constraints, decisions on major matters were often made by the U.S. District Court judges.

Work Outside of the Court

     Most of the work in a bankruptcy case actually occurs outside of court, whether by the debtor and his counsel in preparing and filing the petition and accompanying schedules of assets and liabilities and other forms, the trustee in examining the debtor and the debtor's financial matters, or by the creditors and the United States Trustee in interacting with the debtor and his counsel.

Section 341 Meetings

     Usually, the only time the debtor needs to physically attend any proceeding is at the meeting of creditors. These meetings, also called Section 341 meetings, are not judicial in nature, and are not held in front of a judge. They are conducted by a court-appointed trustee, who examines the debtor under oath as to the debtor's assets and liabilities and related financial matters, and tape-records the proceedings. Creditors are welcome to attend these meetings and ask questions of the debtor, but most do not avail themselves of the opportunity to do so, as there generally is little if anything new to be learned about the debtor's finances. A debtor is usually only required to appear in court before the bankruptcy judge if there is some type of complication, such as an objection to his discharge or to dischargeability of particular debts.

Electronic Case Filing (ECF)

     A number of efficiencies have been emerging in connection with bankruptcy cases. Most bankruptcy petitions are now filed electronically with the Bankruptcy Court Clerk, via Electronic Case Filing, or "ECF". The debtor or his attorney prepares the bankruptcy petition, using Bankruptcy Rule-compliant software, and then uploads it to the Court, paying the filing fee by attorney credit card. Supplemental pleadings and papers are also generally filed electronically.

PACER

     The public may access these public records through PACER, the Public Access to Court Electronic Records, 24/7. In addition, many courts allow bankruptcy case participants and their counsel to appear at court hearings telephonically, saving the time and expense of driving to court. In some cases, it is the judge who appears remotely, via video or teleconferencing.

"Good Old Days"

     Electronic Case Filing represent a radical departure from the "good old days", when the debtor's attorney would type the petition, usually 30+ pages, make 5-9 copies, drive to Court, wait in line for the Clerk to do the intake of the documents, and pay the filing fee by check; creditors who wanted to review the papers would have to have someone drive to the Clerk's office to have the paper file located and copied; and all court appearances required personal appearance in Court, no matter how minor the matter.

Written by Henry Rendler